Dr. Elizabeth Sun - Head of Investor Relations Lora Ho - Vice President & Chief Financial Officer Dr. Rick Tsai - President & Chief Executive Officer

Randy Abrams – Credit Suisse Mehdi Hosseini – FBR Bhavin Shah – JPMorgan Shailesh Jaitly – Nomura Securities Dan Heyler – Banc of America Securities Michael McConnell – Pacific Crest Securities Pranab Sarmah – Daiwa Securities Donald Lu – Goldman Sachs Daniel Zhu – Lusight Research

Welcome to TSMC's Fourth Quarter '08 Results Webcast Conference Call. Today's event is chaired by Ms. Lora Ho, Chief Financial Officer and Vice President, and Dr. Rick Tsai, Chief Executive Officer and President. This conference call is being webcast live via the TSMC website at www.tsmc.com in only in audio mode. Your dial-in lines are also in listen-only mode. At the conclusion of the management presentation, we will be opening the floor for questions. At that time, further instructions will be provided as to the procedure to follow if you would like to ask any questions. Please be advised for those participants who do not yet have a copy of the press release, you may download it from TSMC's website at www.tsmc.com. Please also download the summary slides in relation to today's quarterly review presentation. Once again the URL is www.tsmc.com. I would now like to turn the conference over to Dr. Elizabeth Sun, TSMC's Head of Investor Relations for the cautionary statement before the main presentation by Ms. Ho and Dr. Tsai. Dr. Elizabeth Sun: Thank you, Dan. Good morning and good evening to all participants. This is Elizabeth Sun, Head of Investor Relations for TSMC. Before we begin, I would like to state that management's comments about TSMC's current expectations made during this conference call are forward-looking statements subject to significant risks and uncertainties, and that actual results may differ materially from those contained in the forward-looking statements. Information as to those factors that could cause actual results to differ materially from TSMC's forward-looking statements may be found in TSMC's Annual Report on Form 20-F filed with the United States Securities and Exchange Commission on April 15, 2008 and such other documents of TSMC may file with, or submit to the SEC from time to time. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. And now, I would like to turn the conference call over to Ms. Lora Ho, our Chief Financial Officer and Vice President.

Thank you, Elizabeth. Good morning and good evening to everyone. Welcome to our fourth quarter 2008 earnings conference call. Before my start we have got things next Monday, with the Chinese Lunar New Year. Allow me to send you all the best wishes for a Happy Chinese Lunar New Year. First, I will go over the highlights for our fourth quarter and 2008 full year results. Then I will give you the outlook for the first quarter of 2009. Please refer to the quarterly financial summary slides on our website. All dollar figures are in NT dollars unless otherwise stated. First, the highlights of the fourth quarter. Net sales were $64.6 billion with gross margin and operating margin at 31.3% and 18.6% respectively. EPS was $0.48 declined from last quarter's $1.18 though generating more free cash flow in this quarter our ROE and the wafer shipments both declined sequentially as a result of continued weakness in global economic conditions, which impact overall wafer demand. Let's take a closer look at our income statement. For sequential and year-on-year comparison please let me remind you again that accounting number reported for 2007 do not reflect the effect from an employee profit sharing expensing. This is a major difference from 2008. That being said, our fourth quarter revenue declined 30.6% sequentially and 31.2% year-over-year. Compared with third quarter '08 both gross margin and operating margin were lower. Each declined 15 percentage points and 16.8 percentage points as a result of sharp decline in production activities and partially offset by cost improvement and a favorable exchange rate. Non-operating income was $1.4 billion however we booked a $0.3 billion investment loss in this quarter mainly due to Vanguard and SSMC. For net margin it was 19.3% in this quarter representing a 13.6 percentage point decline over last quarter. Now, let's examine our revenue by applications. Across the board wafer sales all declined sequentially. It was 32%, 34% and 39% quarter-over-quarter decline rate for the communication, computer, and consumer respectively. Overall revenue from communication, computer, and consumer applications accounted for 43%, 32%, and 19% of our wafer sales respectively in fourth quarter '08. In terms of revenue by technology were 65-nanometer though absolute dollar revenue declined sequentially, the percentage of wafer sales increased by 12 percentage point quarter-over-quarter and reached 27%. Total revenue from advanced technology accounted for 65% wafer sales, slightly below 66% of last quarter. Now let’s move to balance sheet and cash flow statements, we ended fourth quarter with $211 billion in cash and short-term investments, which was higher than both previous and year-ago quarter. Sequentially, the accounts receivable declined sharply while the turnover days increased by three we observed no significant increase in collection period. For inventory, as a result of a lower level of production activities both absolute dollar and turnover days declined sequentially. At end of this quarter the inventory turnover days declined to 40 days, 5 days lower than previous quarter. Our balance sheet remained strong, current ratio increased to 4.4 in this quarter. Total cash inflow generated by operating activities was $63.2 billion in this quarter. Free cash flow was $52 billion after $11 billion of capital expenditure. Both were higher than last quarter this was many due to the decline of both accounts receivables and inventory. In financing activity, we disposed $30.2 billion of short-term investments in sum the ending balance was $195 billion, $82 billion more than last quarter. Now, let’s turn to capacity and CapEx. Total installed capacity for the fourth quarter was about 2.5 million, eight-inch equivalent wafers, about 2% more than third quarter ‘08. For 2008 overall capacity was about 9.4 million eight-inch equivalent wafers, a 13% increased over 2007, with advanced technology capacity increased by 27% year-over-year. We spent U.S. $342 million in CapEx during the fourth quarter our 2008 CapEx standing at U.S. $1.88 billion this is a 26% decline over 2007. Now, let me go through our 2008 full year highlights. 2008 was a year of rapid change, after three consecutive good quarters, our fourth quarter was impacted by the big economic recession, which resulted in sharp decline in revenue and profitability. However, 2008 revenue still deliver a 3.3% year-over-year growth in NT dollars over 7.9% in U.S. dollars. TSMC outperformed the worldwide semiconductor industry in 2008. This represented a seventh consecutive year of growth in our revenue and the fifth consecutive year that our ROE exceeded 20%. Our free cash flow increased significantly in 2008 with strong balance sheet and cash position we believe TSMC is well prepared to weather through the challenging economic environment ahead. Also in the past five years, we have substantially increased our cash dividend payout and also engaged share buyback. By end of 2008, TSMC has through cash dividends and share buybacks returned more than U.S. $11 billion back to shareholders. Now let me give you an outlook for the first quarter '09, as you are all aware the global economic recession continue to worsen. First quarter end market sell-through was much below the already conservative expectation. With that based on current business expectation and a forecast exchange rate of 32.66 we expect our consolidated revenue in first quarter of '09 to come in between NT$32 billion to 35 billion. In terms of margin, we expect our first quarter gross margin to be between 1% and 5%. Operating margin to be between negative 19% and negative 15%. This concludes my remarks today. Now I would turn the call over to Dr. Rick Tsai, our CEO for his remarks. Dr. Rick Tsai: Hello, good evening and good morning. I’d like to first comment on the business and industry outlooks, as Lora just said 2008 was a year of rapid change. Our business remains vibrant in the first three quarters of the year, but demand show signs of slowing in the middle of the third quarter. Fourth quarter revenue substantially declined and showed no sign of recovery by year-end. Now, our estimate of the semiconductor industry revenue for the fourth quarter would decline by 25% in fourth quarter, compared to that of third quarter. As a result, for the whole year of 2008, the world semiconductor revenue will likely have registered a decline by about 4%. Despite the sharp downturn in the fourth quarter, TSMC on a full year basis has outperformed the semiconductor industry and delivered the 7.9% growth in U.S. dollars in 2008. Now, as the global economic recession continues to worsen, fourth quarter sell-through was much below the already conservative expectation, and overall demand for semiconductor remains weak. So, the inventory measure in DOI, Days of Inventory, of our customers has increased we believe at the end of fourth quarter, compared to that of the third quarter. In addition, our customer's visibility of their business is still very limited. These all resulted in very slow booking and the steep decline in our first quarter financials. For the whole year of 2009, TSMC forecast the global semiconductor industry revenue to decline sharply by about 30%. Due to supply chains action in reducing inventories, foundry sector will underperform the overall semiconductor industry in 2009. With a very high uncertainty of the end market in the months ahead, we do not have a clear view of the second quarter. However, I do like to share what we are observing with you. That is we are seeing some indications that we may be bottoming out in the first quarter ’09. But we will need more time and data to confirm that observation. This is truly a difficult time for all of us. TSMC is seeing our first quarterly loss since 1990. All of us feel really bad about our first quarter's numbers, I can assure you the whole company and the management team are committed to do our utmost for our shareholders. Now, let me brief you of a few things that we are – were doing. First, we will continue to invest aggressively in our future we will not reduce our R&D investment and we will continue to enhance our technologies and our capabilities. For example, in the area of leading edge technologies we are actively developing our capability so that we can provide embedded CPU to our customers. And in the mainstream technology, we are also developing technologies and capabilities so that we can increase our market share in the analog area, automotive area, and so on. Next, we have been working on reducing the cost in a structured manner for quite some time. In this very difficult time, we will accelerate these efforts. For example, in our 12-inch fabs, we will further leverage our scale so that we can gain more cost advantage. In our eight-inch fabs, we will investing aggressively in information technology so that we can enhance our overall manufacturing productivity. On the customer front during these difficult times it is particularly attractive for our customers to work with TSMC, because of our strong financial position and our dedication to work with some best partners. We will continue to jump through the hoops for our customers. Lastly, we are committed to a minimum payout of 80% distributable earnings of cash dividends. We will pay NT$3 cash dividend per share in 2009, and we have proposed to the Taiwan regulatory authorities to relax certain limitations such that TSMC can have more flexibility in paying cash dividends to our shareholders. This concludes my remarks. Thank you. Dr. Elizabeth Sun: This concludes the management presentation and general remarks. Operator, please open the floor to questions.

At this time, we will open the floor for questions. (Operator Instructions). Your first question comes from the line of Randy Abrams from Credit Suisse. Please proceed. Randy Abrams – Credit Suisse: Yes, good evening. Why does if you can elaborate on your point about you are starting to see some signs of bottoming maybe talk about the areas where you might be seeing some of the signals and if you could talk about the end markets are any further along in a correction process? Dr. Rick Tsai: To indicate as we put many, some of our internal data, some the exchanges with the customers I think some of – a few important ones probably are our booking, booking trend, book-to-bill ratio. These are the important indicators for us at least for the, from second quarter point-of-view. End marketwise again visibility is very limited short-term we see cellphone areas to perform relatively better compared to that of the PC segment. Randy Abrams – Credit Suisse: Okay. And the second question could you walk through a bit more of the options in 2010 to – on the dividends if you track the $3 earnings would equity accounts, can you draw from, and what are you trying to do at least to protect some of that dividend?

Randy, we will – we are committed to pay $3 dividend to adjust that in 2009. With the current economic conditions, which is quite severe recession, while depending on how much we will make in case we make in 2009 so we can distribute dividend in 2010. Current thinking is probably very difficulty in 2010, if the dividend only come from our retained earnings with the current regulations. Therefore, we have made a proposal to the government to relax the current regulations so we can have some flexibility to issue cash dividends allotted from capital surplus and the legal reserve in our book. So, we will communicate with the government and continue talking to them in this regard. Randy Abrams – Credit Suisse: Okay, thank you.

Your next question comes from the line of Mehdi Hosseini from FBR. Please proceed. Mehdi Hosseini – FBR: Yes. Thank you. Two questions. First, I know this, your CapEx guidance could be down by more than 20%. And can you, if you could provide some more color does that mean it could down 30% or 100% because it helps us to better understand the impact on the balance sheet going forward, and then in your guidance or prepared commentary that Q1 could be at bottom does that reflect your expectation that customer inventory write-down is going to be over or are there any other signs that gives you that incremental confidence? Dr. Rick Tsai: On the CapEx, we – I don’t think we can give you any further numbers. However, I would certainly say that your 100% as you just mentioned is too much, is too high. Mehdi Hosseini - FBR: Is downside [business] is also too high? Dr. Rick Tsai: I think my comment on this question probably end about here. We do need a little more time to work that out and once we know that we will share with you at our earliest possible time. The next question is…

Inventory customer? Dr. Rick Tsai: As we said the customer inventory at the end of fourth quarter probably has increased over that of third quarter, but the – as we also calculate our wafer shipment into our customers and we, and also with their revenue outlook in the first quarter we believe their inventory level is going to come down significantly in the first quarter. However, the DOI will not stabilize we believe until at the end of second quarter at the earliest. Mehdi Hosseini - FBR: To what extent does that depend on the sell-through over the next two weeks during the holiday season? Dr. Rick Tsai: I think – its obvious the holiday season sell-through contribute a great year to the higher inventory, higher DOI at the end of fourth quarter, compared to that of the third quarter. I think in addition we believe our customer-to-customer basically also were not giving out really any orders to them during the fourth quarter time unless they – they have to. Mehdi Hosseini - FBR: How about the next two weeks, the Lunar New Year holiday? Dr. Rick Tsai: You mean the sell-through or? Mehdi Hosseini - FBR: Yes, yes or the expectation that customer inventory is coming down in Q1, to what extent is that [deliberant] or dependent on the sell-through over the next two weeks, the Chinese New Year holiday? Dr. Rick Tsai: All right. Well we do – in our view we are not assuming a good Chinese New Year sell-through. It's obviously difficult for us to predict the sell-through in Chinese New Year. Overall, well – we – the possible there although if not clear. The only thing we can say if the Chinese government, if the – having a program to stimulate the purchase of the electronics in our – in their, I’m sorry – in their agriculture area. Mehdi Hosseini - FBR: Thank you.

Your next question comes from the line of Bhavin Shah from JPMorgan. Please proceed. Bhavin Shah - JPMorgan: (Inaudible) shareholder commitment because, there a lot of companies are cutting dividends and you are….. Dr. Rick Tsai: Okay, okay.

Bhavin, could you please speak louder, we are not able to hear you very well. Bhavin Shah – JPMorgan: Sorry, could you hear me well now?

Yes. That is much better. Bhavin Shah – JPMorgan: Okay. Yeah, I was just saying I – first of all I wanted to say you are just setting really new standards in shareholder value commitment because other companies are talking about cutting dividends and you are making effort to sustain it. So, I have two questions, my first question is that assuming that you would get necessary rules changed that you are hoping for, how – for how long can you commit to paying $3, assuming that your cash balance continues to decline over the next two or three years. In other words, is that a minimum cash that you want to hold and that sets higher priority or a $3 dividend?

Bhavin. Bhavin Shah – JPMorgan: That is my first question.

Okay. Bhavin, we do not think cash flow is a problem for us. It is the retained earning constraint, if Government would approve our proposal, which allow the capital surplus plus the legal reserve to be a part of dividend stream, that part together can support around $4.50, also depending on how much profit we make in 2009, certainly that $4.50 can be quite significant to bridge us into the barrier. Bhavin Shah - JPMorgan: Okay, that is helpful. My second question is for Rick. You know, Rick you mentioned you are seeing some, if not confirming, but some signs of bottoming in first quarter. Do you feel those signs are apparent at the beginning of the quarter or it will be more apparent, sort of later part of the quarter? Dr. Rick Tsai: You mean, beginning of the next - second quarter or. Bhavin Shah – JPMorgan: In other words, what sort of linearity are you seeing in first quarter, January versus March in terms of loading et cetera?

I think the, Bhavin basically it is probably more important to look at the booking profile rather than just the billing profile. I cannot give you much detail, what I can say is the, we believe we are seeing a pattern of the booking and the book-to-bill ratio. There - the numbers are still not good, I mean I do not want to mislead any of you, the numbers are not good, but we believe we have seen the bottom overall, but we would believe at least the short-term indicated. Bhavin Shah - JPMorgan: Thank you. Dr. Rick Tsai: Thank you.

Your next question comes from the line of Shailesh Jaitly from Nomura Securities. Please proceed. Shailesh Jaitly - Nomura Securities: Yeah. Hi, You earlier mentioned that second quarter you expect cellphone or the communication segment to do better than PC. Does that mean and I would assume that probably you expect that probably inventory issues in the communication segment will get over first, what is your read on the PC segment when do you think the inventories there will normalize? Dr. Rick Tsai: I think we need some more time. The visibility right now is not enough for me to give you a good answer. We need probably another couple of months. Shailesh Jaitly - Nomura Securities: Okay. And as for the IDM bookings are concerned, like the whole business has fallen, IDM has fallen a bit more that was kind of expected. But how far are we – from what you can say the minimal – minimum contractual agreements of loadings with the IDMs? Dr. Rick Tsai: I believe we would say - said the fall in the IDM at least ratio wise is expected I believe, you believe they are moving, they are loading internal to their internal fabs. I think that is certainly part of the reason. On the other hand, we have also look at the inventory level and the revenue situation with our IDM customers and our fabless customers. If you look at the numbers I think you would see the revenue decline with the IDM customers is somewhat more severe compared to at least the large travel equipment and the inventory level at the IDM customer levels is also quite high. I think these also contributed to the much lower booking and the billings from IDM customers. To the contract, we have contract with some customers and now with others they all vary and again I think they play partially a role, but not necessarily a major role. Shailesh Jaitly - Nomura Securities: Thanks Rick. Let me just rephrase what I was asking, because looking at some of your IDM customer's internal utilizations. Some of them have seen internal utilizations dipping to about mid-40s rage in 1Q. So, I would assume that whatever they had to come from foundries, they should have. Am I wrong in thinking or they have lot more room to cut? Dr. Rick Tsai: It all depends. The products they all, they are working with us. With many of our IDM customers to products they work with us, only done in our wafer fabs. Of course, there are some, I’m sure when they can make in their own fab they would have moved in whole already, but we have many I think especially this year more advanced technology spending of the products are at only for in TSMC fabs. Shailesh Jaitly - Nomura Securities: Okay, thanks. Dr. Rick Tsai: Thank you.

Your next question comes from the line of Dan Heyler from Banc of America Securities. Please proceed. Dan Heyler – Banc of America Securities: Good evening guys. Good evening, Rick. Dr. Rick Tsai: Hello. Dan Heyler – Banc of America Securities: I had a quick question on, I wanted to focus on capacity assuming that we have a fairly modest recovery I guess. To what extent do you think does this industry will see some consolidation either amongst the logic IDMs or the other foundries, clearly a sharp downturn brings hope of consolidation, on the other hand it seems to be that there are plenty of government willing to support the semiconductor industry even supporting the DRAM industry. So, I’m wondering to what extent do you think there will be rationalization in the Logic IC business. Dr. Rick Tsai: Well, I think Dan, I think you would have read that the semiconductor industry is slowing down and for a while as we have reported numerous times and this severe downturn will only make that worse. I believe that the some kind of consolidation will happen in the semiconductor industry. And not necessarily only in the – with the companies with fabs, but I guess your question is more on the capacity. Dan Heyler - Banc of America Securities: Yep. Dr. Rick Tsai: I, Logic IDMs I – we I only can say that the I believe probably more capacity will be shutdown, but however in the foundry sector I am not yet sure because of what you just mentioned, the government – some government has action to keep them open. So, the capacity I think there will be a capacity there for some time. Dan Heyler - Banc of America Securities: Okay. And then the second question on TSMC specifically I guess on the capacity question, in the last downturn there was some shutdowns internally on six-inch I am just wondering, do you anticipate a need to – to close some facilities eventually it's obviously you are investing in R&D and are investing in eight-inch capabilities, but at what point will you just effectively say, look we have way too much capacity for the next – next two years, what is the thought process there internally at TSMC? Dr. Rick Tsai: Process is going on. We review every aspect of our operations, and with the certain assumptions of course on our outlook in the next several years. We of course have not completed that work, we certainly, right now what we’re doing as you know is shutting down equipments in different fabs as we see demand in the short-term, but more important we are looking at a structured approach. So, this is being reviewed, we do not have any definitive plan. So, we are certainly working on that. Dan Heyler - Banc of America Securities: Okay, one short follow-up and I’ll get back inline on 45-nanometer to what extent do you feel a need to build-out a new 45 nanometer fab now as I guess from the standpoint of obviously demand is uncertain, but from a competitive landscape, it seems as though Samsung is getting a little more aggressive certainly very aggressive at 45 to what extent do have the power just to wait as long as you want on the 45 or do you really need to go forward with that this year as planned? Dr. Rick Tsai: We already of course have a certain production capacity in 40 nanometer already, we will build up that capacity to I would say a significant level by – in second quarter and on until of course the end of the year. You mentioned second fab? Dan Heyler - Banc of America Securities: Yeah, you’re doing that internally I guess it within your R&D line, but I am understanding if you, you want to go for a full immersion fab to be more efficient right? Dr. Rick Tsai: Yes. We are definitely, right now there are already there is no such thing as R&D line for 40-nanometer already, they are already converted into the production line. Now, we have a production line with capacity, well I would say significant capacity. We believe we have a strong product pay pal portfolio from our key customers. We believe we will be the first to ramp, we will also have a strong share of the market. Dan Heyler - Banc of America Securities: Okay. So, you won't need to deploy, Phase IV fab 12 to fully scale 40, 45? Dr. Rick Tsai: Often we will – we will. Dan Heyler - Banc of America Securities: Okay. Dr. Rick Tsai: The first phases will be – will be full very soon. So, we will at least set up a partial part of the fab Phase IV. Dan Heyler - Banc of America Securities: That is okay. Thanks. I will get back in line. Dr. Rick Tsai: Thank you.

Your next question comes the line of Michael McConnell from Pacific Crest Securities. Please proceed. Michael McConnell - Pacific Crest Securities: Thank you. Lot of questions have been answered. Lora, could you just talk about the outlook this year for capacity in terms of what we should be thinking about year-over-year for the increasing capacity?

Okay. We are still working on the capacity expansion plan and number has not been finalized. But in terms, from where we can see right now, even there is a increase in 45, there will be 45, 49 increase I would say at this moment, the year-over-year capacity increase will be in the single-digit level. If you take our fourth quarter capacity times four that give you above single-digit level of increase year-over-year. Mike McConnell - Pacific Crest Securities: And what are you thinking about for depreciation year-over-year?

Its still need to work out, but maybe I can share with you with a conservative view on the capital expenditure, we think the depreciation for 2009 will be very similar to 2008. Mike McConnell - Pacific Crest Securities: And looking at your operating margin guidance that would imply based on my math about an 18% decline roughly in OpEx to kind of get to where you are going to be relative to gross margin and revenue. So, obviously you're shortening the amount of weeks you're working right now when we kind of get – how can we kind of think about a normalized OpEx here when things do recover, you have done a lot of nice work there in the OpEx, but how should we think about those – those two lines as we kind of move forward?

Michael, we are doing some cost saving in this factory and also saving on the operating expenses, its across the board activities. In the normal time, you can see on 2008 that the operating expense accounts around 11% of our revenue that is for the whole year, of course that includes employee profit sharing. With the profit going to the last and that employee profit sharing will – can be considered variable cost. The cost saving part in operating expenses Rick just said we will not cut any R&D expense. Michael McConnell - Pacific Crest Securities: Sure.

So, I think in general the operating expense will roughly account for 15% of our revenue. Michael McConnell - Pacific Crest Securities: Okay. And then if we kind of get into a recovery mode, whenever that is, should we kind of be thinking more about returning to that 11% threshold or could we even be lower based on some of the efficiencies you are putting in place right now.

Yeah. I think you can assume that. Of course we, of course we can hope it can be lower than that. Michael McConnell - Pacific Crest Securities: Okay. And last one from me. How should we think about the net non-operating income line for Q1?

Lora.

: Michael McConnell - Pacific Crest Securities: Okay.

I hope that gives you some idea. Michael McConnell - Pacific Crest Securities: Any idea how big or it's roughly I mean double kind of?

I cannot tell you how big it will be. Michael McConnell - Pacific Crest Securities: Okay. Thanks a lot.

Your next question comes from the line of Pranab Sarmah from Daiwa Securities. Please proceed. Pranab Sarmah – Daiwa Securities: Yeah. Thank you. Can you give us a little bit of idea on the first quarter ’09, whether you’re seeing utilization rate at 12-inch will be higher than the eight-inch or it was quite similar in both fabs?

Are you asking whether utilization rate is about the same across all fabs? Pranab Sarmah – Daiwa Securities: All fabs or advanced technology (Inaudible) in the mainstream technology.

Okay, all right. First quarter, our advanced technology they are both very low for our first eight-inch is lower than 12-inch. Pranab Sarmah – Daiwa Securities: And Lora break-even utilization rate currently what percentage point it’s going on and what is your effort like how much you can really lower it down over next one or two quarters given all these cost cutting measures?

We have watching the break-even point. At this point in time, our break-even point at operating income level is roughly above 40% utilizations slight or slightly below 40. Pranab Sarmah – Daiwa Securities: And is there any way to cut it down further to high 30s or mid 30s?

I think there is a way, but we have been doing that since fourth quarter in terms of cutting cost, Pranab I can share with you the total cost savings in the fourth quarter was roughly NT$1 billion and for the first quarter we’re going to do more, so estimate cost saving will be roughly 4 billion including the costing of OP, operating expenses also the cost of sales, that also helps. Pranab Sarmah – Daiwa Securities: My last question is, yes, okay.

I was just trying to say that helps a little bit to lower down the break-even point. Pranab Sarmah – Daiwa Securities: And last question is the tax rate guidance for 2009 how we should take it for our model?

The tax since the profit will be low in 2009 and we also enjoy some tax credit, so the net tax expenses and tax credit will be very low. Pranab Sarmah - Daiwa Securities: It will be around say 12 to 13% tax rate, or it will be lower below 10% in that base?

It's much lower than 10%. Actually, tax expenses is probably very close to tax credit. Pranab Sarmah - Daiwa Securities: Okay. So, it's almost there. Okay. Thank you very much.

Your next question comes from the line of Donald Lu with Goldman Sachs. Please proceed sir. Donald Lu - Goldman Sachs: Yeah. Say, Lora I guess I want to follow-up the last question for Q – what is the tax rate for Q1 because you're losing money and we never modeled your tax, because you never losing many before?

First quarter we will have loss so there was no income tax. Donald Lu - Goldman Sachs: But you also have tax credit can we get tax credit?

Yeah, we can get tax credit. So, the next tax – net tax will be positive in first quarter. Donald Lu - Goldman Sachs: How much should we model?

It's probably difficult to tell you. And I think it will be in the 1 billion in range. Donald Lu - Goldman Sachs: NT$1 billion.

Right. Donald Lu - Goldman Sachs: And you just said for the whole year the effective tax rate should be almost zero?

Yes. Donald Lu - Goldman Sachs: Okay. Thank you very much. My second question is on the break-even utilization, and you just mentioned it's slightly below 40%? Right now.

Yes it is. Donald Lu - Goldman Sachs: I remember back in 2001 your break-even utilization was also about 40%?

No. Donald Lu - Goldman Sachs: And over the years there are so many fabs are depreciated et cetera. Why it has not improved?

Donald actually our utilization impact to 2001 was 45% so over the years we have improved five-percentage point. Donald Lu - Goldman Sachs: But in fact if you remember correctly I think is in the second quarter of 2001 the utilization was around 40 or 41% and your operating parity break-even?

At that time there is no employee profit sharing. Donald Lu - Goldman Sachs: Got it.

Yeah.

Your next question comes from the line of Daniel Zhu from Lusight Research. Please proceed. Daniel Zhu - Lusight Research: Hi, my first question is how many percent of your guidance revenue is based on actual orders already placed by customers, and to what extent have you experienced large-scale order cancellations or postponement in the last three months? Dr. Rick Tsai: I think for the first quarter revenue I would say the booking 85% more higher it's already in we have seen holds wafer holds of finished goods holds from our customers during the last three months we have not doing much cancellation? Daniel Zhu - Lusight Research: Okay, how about the postponement? Dr. Rick Tsai: Yeah that is wafer holds that is what I mean postponement. Daniel Zhu - Lusight Research: Okay. Thank you. And my second question is you mentioned earlier to expand more to analog products such as automotive products. Do you have a target see like how many percent of your total revenue is going to be derived from analog products back in the next two years? Dr. Rick Tsai: We do. I do not have them at the – at the top of my head unfortunately. Daniel Zhu - Lusight Research: But roughly like a 6% to 10% or something like that? Dr. Rick Tsai: Probably its not 10%. It’s probably will be in the single-digit area for a while but I think we like that to go to from a mid single-digit to a high single-digit. Daniel Zhu - Lusight Research: Okay thank you and my last question if I may ask is have you ever thought of going to a solar PV industry I mean in the next three years or five years? Dr. Rick Tsai: We do look at opportunities, which are in our view adjacent to our industry and where our core competency can be of current value. I think solar area PV area is one of those that we are looking at. However, there is no decision being made. Daniel Zhu - Lusight Research: Okay, thank you very much. These are the questions I have. Dr. Rick Tsai: Thank you.

Operator, in the interest of time we will open for questions for two more callers.

Your following question comes from the line of Bhavin Shah from JPMorgan. Please proceed. Bhavin Shah - JPMorgan: Rick, I understand the environment is very uncertain. But, would it be possible for you to sort of say at – you know in which quarter, you might expect to reach, I do not know whether say 5,000 wafers a months of 45-nanometer in terms of output or say $100 million U.S. in revenues on a quarterly basis. Are any sort - of some sort of benchmark that you think you are hoping to achieve for 45-nanometer? Dr. Rick Tsai: I would strive to achieve for instance the 100 million it less some time in third quarter. Yeah. Bhavin Shah - JPMorgan: Okay. Thank you. Dr. Rick Tsai: Thank you.

Your next is a follow-up from the line of Randy Abrams from Credit Suisse. Please proceed sir. Randy Abrams - Credit Suisse: Yes, could you elaborate on your first quarter with the effective Chinese New Year maybe talk about the linearity monthly sales through the quarter? Dr. Rick Tsai: : Randy Abrams - Credit Suisse: Okay. Thanks, and could you talk about in fourth quarter been non-wafer revenue it's been about 9% of revenue did that go up in fourth quarter because of the wafer shipments fell so much I am just trying to reconcile the ASPs for wafer shipments, it would imply ASPs actually went up a bit in fourth quarter?

Yes the non-wafer revenue did went up in fourth quarter, and it will be even higher in the first quarter. Randy Abrams - Credit Suisse: Okay give an approximate magnitude of percent of sales?

We did not disclose that kind of magnitude in the past and I don’t think we should make an exception this time. Randy Abrams - Credit Suisse: : Dr. Rick Tsai: We are seeing some more India mainstream technology area. I think our efforts in working toward a better structure possibility ahead what reasonably well. Now we have worked with so many customers over the last six months, also I think the price decline rate in 2008 has improved over that of 2007 we would strive again to achieve that in 2009. And so far I think of course this lonely January but so far we do not see some major problem ahead. Thank you. Randy Abrams - Credit Suisse: Thanks, Rick. Dr. Elizabeth Sun: Operator, I think this concludes our conference call.

Before we conclude TSMC's fourth quarter '08 results webcast conference call today. Please be advised that the replay of the conference call will only be accessible through TSMC's website at www.tsmc.com. Thank you all.